Democrats' Health Care Reform is Costly

February 9, 2004

Health care costs and the number of uninsured continue to rise, not for lack of government, but because too much government has crippled the normal market processes that make health care of ever-improving quality available to an ever-larger share of the population, says Michael Canon, a senior fellow with the National Center for Policy Analysis.

Health care reform proposals by the five major Democratic candidates for president in 2004 (Clark, Dean, Edwards, Kerry and Lieberman) would add even more government to the mix.

How much more? Between 2005 and 2013, the candidates' proposals would cost anywhere from $591 billion (Edwards) to $6.268 trillion (Kucinich). To put this in perspective, consider that the prescription drug entitlement, recently enacted as part of Medicare reform and considered the largest new government program since the Great Society, is estimated to cost only $410 billion.

Financing any of the proposals would require the next president to repeal all of the tax cuts enacted in 2003 ($140 billion from 2005 to 2013) and a significant portion of the tax cuts enacted in 2001 ($1 trillion from 2005 to 2001).

The U.S. Department of the Treasury estimates that repealing the 2001 and 2003 tax cuts would raise taxes an average of $1,544 for more than 100 million Americans and cost a married couple with an income of $40,000 and two children $1,933 annually.

At least two of the proposals would require further tax increases; Kucinich would impose a 7.7 percent payroll tax to finance a single-payer system.

The proposals are likely to cost much more than projected and would add to an already growing burden on taxpayers. Also, each proposal would give government greater power to dictate the type and level of health benefits consumers would receive, says Cannon.